Don’t Blame Housing Shortage For High Property Prices.

According to new research, shortage of houses cannot be a cause for unaffordable property prices, as construction in new developing areas are keeping up with population growth nationally.

Wise Real Estate Advice examined that the construction of residential property and population over a three-year period, discovered that national supply was already at a higher level than expected.

 

Throughout the past three years, 676,067 new suburban houses were permitted, compared to 461,383 to the previous three years which ended in 2010” Mark Ribarsky, Head of Wise Real Estate Advice, Buyers Agent.

When putting everything into perspective, the record volume of new and improved dwellings in the national pipeline, the population growth of Australia over each of the three-year period was 1.063 and 1.164 million. “When looking at it in another way, the population growth was 100,000 less, however, we approved 200,000 more properties.

Ribarsky mentioned that some critics had ‘tangled’ the strong performance of Melbourne and Sydney’s property markets with shortage of properties, when in fact, approvals were at historic highs.

“Whilst many interest groups and parts of the community will strongly disagree with myself, conformation and evidence clearly does not support those accounts” he said.

“For example, when comparing first hand supply and population growth of 2016 to 2008 when the median house price in Sydney had only increased by 0.6 percent. Similarly, the population growth was the same, however there were twice as more new properties that were delivered in 2016”.

One thing is that, a stronger economy and consumer behaviour comes into play when interest rates are as low as they have ever been, which will increase buyer activity to the point where it is above the demand of population growth.”

“If we were to observe cities such as Perth, Brisbane and Adelaide we would be able to recognise what happens when the attitude of consumers is not as strong, while the levels of supply are high.”

“With house price continuing to grow strongly in Melbourne and Sydney, this all comes down to a number of factors,” according to Ribarsky, “however, a shortage of supply was not a contributing factor. Furthermore, with large amounts of new supply, Mark Ribarsky points out extremely uncertain rental growth in capital cities in five years.

“If there was a huge scarcity of housing in the market, rents would significantly increase each time a lease would expire, which is evident through research.”

When looking at housing supply pipeline, buyers advocate Mark Ribarsky discovers that across a number of regional cities in Australia are considerably tighter than other capital cities. With a more controlled housing supply and affordable properties, we have been investing in many regional cities that has potential growth. In 2013, majority of residential buildings that were built were units. Ribarsky pointed that ten years ago three out of ten properties that were officially recorded were apartments, however as of today, 1 out of 2 properties were recorded.

“In 2016, Canberra was on top of the list with 80 per cent of new properties were apartments, while Sydney had 70%, Brisbane with 58%, and 54% for Melbourne,” according to Ribarsky.

Official data indicates that when considering all capital cities in Australia, Hobart will have a shortage of supply for a couple of years. However, for rental return and capital growth, Hobart outperformed all the other capital cities in Australia for the year of June 2017. Overall research only suggest that Hobart will only continue to maintain its position for a few more years.

  • +61 3 9982 4545





    Your Name *
    Your Email *
    Phone Number
    Your Message
  • Wise Real Estate Advice

    Wise Real Estate Advice
    Reviewed from Google

    5 out of 5 stars

    Hari Krishnan
    Hari Krishnan

    5 out of 5 stars

    posted 1 month ago

    I found Mark through Google!!!.
    Since my first meeting I felt so confident in Mark's ability and experience in being able to deliver a great result. I was very much impressed with Mark's service as he made the whole process easier and stress free!!!!

    I am really happy because I bought exactly what I was looking for and it was well under my top budget. Most importantly We did it within few weeks.

    Since day one Mark was very pro-active.

     Mark emailed multiple properties every week within my search parameters and wish list.
     Mark allowed me to be involved as much as I wished.
     Mark inspected the properties I liked.
     Mark explained the positives and negatives about each property.
     Mark held a pre-auction meeting and attended the auction
     Mark's strategies and suggestions like where he’ll stand during the auction, how he’ll handle the negotiation etc. etc. and through to the final shaking of hands inside the house all played out in a positive way.

    Thank you Mark for all your work in getting me the right house for the right price!

    I highly recommend Mark for everybody who wants to find a good place to live or invest.

    Many, many, many thanks!

    Ken Stewart
    Ken Stewart

    5 out of 5 stars

    posted 5 months ago

    Mark was personally recommended to me as someone who could be of real help in appraising my property of interest and subsequently representing me at auction.
    He made time to meet for an initial chat over coffee. I was immediately impressed and relaxed with his easy and honest nature, as well as his willingness to listen to my needs.
    A genuinely nice bloke... well experienced in the RE scene, totally committed to helping his clients.... all in all, a very worthwhile experience.

Summary
Don't Blame Housing Shortage For High Property Prices.
Article Name
Don't Blame Housing Shortage For High Property Prices.
Description
Wise Real Estate Advice examined construction of residential property over 3 years discovering that national supply was higher than usual.
Author
Publisher Name
Wise Real Estate Advice
Publisher Logo